TY - JOUR
T1 - Resource-based cities and the Dutch disease
AU - Takatsuka, Hajime
AU - Zeng, Dao Zhi
AU - Zhao, Laixun
N1 - Funding Information:
This paper is a revised version of our RIETI Discussion Paper #13-E-001. We thank two anonymous referees and two editors for valuable comments and suggestions that have greatly improved the paper. We also thank Yuko Akune, Marcus Berliant, Masahisa Fujita, Nobuaki Hamaguchi, Keith Head, Minjun Shi, Takaaki Takahashi, Jacques-François Thisse and Kaizhong Yang for their helpful suggestions. This research was partially funded by JSPS KAKENHI Grant Numbers 26380282, 24243036, 24330072, 24530303, 20730183 of Japan.
Publisher Copyright:
© 2015 Elsevier B.V.
PY - 2015/5/1
Y1 - 2015/5/1
N2 - This paper examines the relationship between resource development and industrialization. When transport costs are high, the region with a more valuable natural resource enjoys a higher welfare than the other region. However, as transport costs decrease, firms begin to move out of the region, causing the Dutch disease to occur, initially in terms of industry share, and eventually in terms of welfare too when transport is sufficiently free. A resource boom in intermediate inputs may strengthen the tendency for manufacturing agglomeration in the same region, but a resource boom in consumption inputs will weaken this tendency. The model thus provides insight for cities to utilize their limited resources efficiently.
AB - This paper examines the relationship between resource development and industrialization. When transport costs are high, the region with a more valuable natural resource enjoys a higher welfare than the other region. However, as transport costs decrease, firms begin to move out of the region, causing the Dutch disease to occur, initially in terms of industry share, and eventually in terms of welfare too when transport is sufficiently free. A resource boom in intermediate inputs may strengthen the tendency for manufacturing agglomeration in the same region, but a resource boom in consumption inputs will weaken this tendency. The model thus provides insight for cities to utilize their limited resources efficiently.
KW - Dutch disease
KW - Industrialization
KW - Resource goods
KW - Resource-based cities
KW - Transport costs
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U2 - 10.1016/j.reseneeco.2015.01.003
DO - 10.1016/j.reseneeco.2015.01.003
M3 - Article
AN - SCOPUS:84923556549
SN - 0928-7655
VL - 40
SP - 57
EP - 84
JO - Resources and Energy Economics
JF - Resources and Energy Economics
ER -